It’s all in the name at the top of the recog­ni­tion tree

Dis­tinc­tive names, as expected, make up the Best Global Brands list

Business Day - Business Law and Tax Review - - BUSINESS LAW & TAX REVIEW - GAELYN SCOTT

MANY of the brands that made it big in the In­ter­brand Best Global Brands 2012 sur­vey are in­her­ently dis­tinc­tive, which sug­gests that lawyers may be on to some­thing when they say that you should adopt dis­tinc­tive rather than de­scrip­tive brand names.

While it may be eas­ier to mar­ket the prod­uct ini­tially if the name says what the prod­uct is, it will be dif­fi­cult to get a trade­mark reg­is­tra­tion for it, and it will be dif­fi­cult to stop com­peti­tors us­ing sim­i­lar names. In the long term, the de­ci­sion to choose a dis­tinc­tive name will pay off.

There were few sur­prises in the sur­vey, with Coca-Cola re­tain­ing its num­ber one spot and get­ting a val­u­a­tion of $77bn, but it’s the tech brands that once again dom­i­nate the rank­ings. Ap­ple comes in at num­ber two with a val­u­a­tion of $76bn, fol­lowed closely by IBM, Google, Mi­crosoft, In­tel (8) and Sam­sung (9). Ap­ple was un­doubt­edly the star per­former, go­ing up six places from its 2011 rank­ing, and see­ing its value in­crease by 129%.

What lessons can we learn from the sur­vey? Well, for starters, it’s clear that brands are of­ten worth an ab­so­lute for­tune. For many com­pa­nies, the brand is the sin­gle most valu­able as­set, es­pe­cially in cases where there’s lit­tle in the way of bricks and mor­tar, or plant and ma­chin­ery — think com­pa­nies like Google, Ya­hoo and Face­book. A brand can ob­vi­ously be val­ued, it can be sold ei­ther with or with­out the com­pany, and it can be used as se­cu­rity for fi­nance (Ford put its logo up as se­cu­rity re­cently to ob­tain the fi­nance it needed to sur­vive the re­ces­sion).

It goes with­out say­ing that the brands that are in the top 100 have all been pro­tected — reg­is­tered not only for the prod­ucts for which they are used, but in cer­tain cases also those for which they are likely to be used, pos­si­bly through brand ex­ten­sion, li­cens­ing or co-brand­ing.

They are no doubt reg­is­tered in the coun­tries where they are used at pre- sent, but also in those coun­tries where they are likely to be used in the fu­ture. Yes, trade­mark pro­tec­tion may some­times seem quite ex­pen­sive, but it’s small beer when com­pared with the ben­e­fits it pro­vides and the value it adds. Don’t be­lieve me? Try sell­ing a busi­ness that has no trade­mark pro­tec­tion.

From a trade­mark law per­spec­tive, the In­ter­brand list is a smor­gas­bord. There are ex­am­ples of those trade­marks that lawyers like so much, the made-up and mean­ing­less names that are so easy to pro­tect and so easy to en­force — ex­am­ples in­clude Google, Xerox and Adi­das (a con­trac­tion of the founder’s name Adolf Dassier). There are names that, al­though slightly sug­ges­tive of their prod­ucts, are still dis­tinc­tive enough to be pro­tectable, like Coca-Cola, Mi­crosoft and eBay.

There are ge­o­graphic names and or­di­nary dic­tio­nary words that are used fan­ci­fully and that are there­fore good trade­marks, like Ama­zon, Pam­pers, Visa and GAP. There are per­sonal names and sur­names that have be­come dis­tinc­tive through enor­mous use, like Louis Vuit­ton, John Deere, Ford and Dis­ney. There are ini­tials and acronyms like UPS, KFC and SAP. There are let­ter and nu­meral com­bi­na­tions like 3M. There are marks where there’s dis­tinc­tive­ness in the styli­sa­tion of the word or let­ter, like the Coca-Cola logo, the McDon­ald’s ‘M’, and the Bud­weiser sig­na­ture.

There are stand-alone lo­gos like those be­long­ing to Ap­ple, Nike, and Shell, and there are lo­gos that are used to­gether with brand names, like those of Mercedes, VW and Audi. There are lo­gos and styli­sa­tions where colour plays a ma­jor role, like those of Google, eBay and Mi­crosoft. There are brands that are used pri­mar­ily by way of li­cens­ing or fran­chis­ing ar­range­ments, like McDon­ald’s and KFC, there are brands that fea­ture strongly in co­brand­ing re­la­tion­ships like In­tel and Amer­i­can Ex­press, and there are brands where the owner is on to the fact that the name gets used gener­i­cally far too of­ten, like Kleenex, which has the words “brand tis­sues” ap­pear­ing along­side the name.

In­ter­brand says: “Jobs recog­nised that a brand is so much more than a logo… He also recog­nised that a brand is what con­nects a busi­ness with the hearts and minds of con­sumers… In­creas­ingly as­so­ci­ated with the lux­ury sec­tor, Ap­ple now pro­duces items that con­sumers feel that they must own to fit in so­cially.” But not all tech com­pa­nies fared as well.

Nokia saw its brand value drop sig­nif­i­cantly and slip from 14th place to 19th, Black­berry dropped from the mid-50s to num­ber 93, and Ya­hoo just made the list at num­ber 97. As for the com­pany with the much-hyped list­ing, Face­book, it came in at just 69.

The old tra­di­tional brands are still in the mix, though they’re per­haps a bit more there­abouts than there these days. GE and McDon­ald’s may be at six and seven, but Kel­logg’s (29), Col­gate (47), Nes­tle (57) and Shell (75) must be a lit­tle con­cerned.

New-age brands, on the other hand, look good, for ex­am­ple Ama­zon (21) and eBay (36). Car man­u­fac­tur­ers come out well — Toy­ota (10), Mercedes (11) and BMW (12) — and the fi­nanciers are still hang­ing in there, for ex­am­ple JP Mor­gan (32), HSBC (33) and Gold­man Sachs (48).

Judg­ing by the per­for­mance of the al­co­hol brands — Bud­weiser (31), Jack Daniel’s ( 81) and Smirnoff (90) —peo­ple continue to drown their sor­rows, but the pres­ence of Moët & Chan­don (98), not to men­tion Porsche (72) and Fer­rari (99), sug­gests that there are still a con­sid­er­able num­ber of high rollers out there.

The num­ber of fash­ion and lux­ury brands in the list would seem to con­firm this, with Louis Vuit­ton (17) top­ping the list, fol­lowed by a com­pany that was re­cently in trade­mark lit­i­ga­tion with Chris­tian Louboutin about red-soled shoes, Zara (37), Gucci (38), Her­mes (63) and Cartier (68). US brands dom­i­nate the top 100, al­though there are some big Euro­pean brands in there like H&M (23) and Ikea (28), Ja­panese brands like Canon (30) and Sony (40), and Korean brands like Hyundai (53) and Kia (87).

There are sur­pris­ingly few Chi­nese brands on the list, how­ever.

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